Leniency and Cartel Size: A Note on How Self-Reporting Nurtures Collusion in Concentrated Markets
9 Pages Posted: 25 Apr 2006
Date Written: April 2006
Leniency programs lower the expected cost of anticompetitive behavior to the extent that they allow colluding firms to pay reduced fines. This paper connects this potential adverse effect to the number of firms involved in the cartel agreement. It is shown that leniency programs may provide firms with an incentive to form cartels of limited size in concentrated markets.
Keywords: Leniency programs, Cartels, Self-reporting, Collusion
JEL Classification: D43, L13, L41, L44
Suggested Citation: Suggested Citation